Food And Beverage 2012, A Taste Of Things To Come

Based on interviews conducted with board-level executives at more than 90 leading manufacturers, retailers, and food service companies from around the world, this report examines trends shaping the food and beverage industry today and discusses what those trends mean for the future of such businesses.

Over the past three decades, there has been a significant trend of declining relative commodity prices that has enabled consumers to purchase higher-priced specialty foods including organics and store prepared meals. However, since 2000, the prices of corn and rice have doubled, while the price of wheat has tripled.

Higher relative food prices should lead to increased purchasing of low-priced, private-label, and discount products and shopping at low-priced retailers. It should also lead to a shift away from eating meals outside the home. However, higher energy prices and slower economic growth will also factor in.

Higher food trends may result in retailers struggling to hold the line on food price increases by either absorbing a reduction in margins or by pressuring their suppliers to absorb this reduction.

According to the Deloitte survey of 93 top food and beverage executives, the key consumer trends currently shaping the industry are:

• Convenience (66%)
• Premiumization (48%)
• More out of home consumption (36%)
• Choice/selection (23%)
• Freshness (21%)
• Shopping experience (20%)
• Prepared food (14%)
• Regional pride/nationalism (11%)

Additionally, the key issues identified as drivers of the industry in the future include:

• Health/nutrition (79%)
• Convenience (66%)
• Price/growth pressure (54%)
• Regulation (54%)
• M&A consolidation (52%)
• Attracting talent (51%)
• Corporate responsibility issues (51%)
• Supplier/retailer relationships (49%)
• Premiumization (48%)
• More brand-led (46%)
• Managing/cutting cost (43%)
• Innovation (40%)
• Sustainability/environment (35%)
• Rising disposable income (37%)
• More out of home consumption (36%)